Major consumer electronics and IT retailers have lost sales over the weekend after major banks including, Westpac, NAB and St George joined the CBA in cancelling credit cards to protect their customers.The Commonwealth Bank, Westpac, St George and National Australia Bank either blocked or cancelled thousands of credit cards over the weekend, following a data breach at a merchant on Friday.
Front counter staff at a Dick Smith store in Sydney told ChannelNews that several customers had tried to pay with a credit card that had been cancelled. A Harvey Norman Manager at a Sydney North Shore store said on Saturday: “We lost two sales this morning because of cancelled credit cards”.
CBA said it had used SMS, e-mail and letters to tell customers of the potential breach and has cancelled some 8000 credit cards.
The bank says it noticed fraudulent transactions over its network and alerted card issuers Visa and MasterCard as well as the breached merchant and affected customers, but would not release the name of the affected merchant or its acquiring bank.
Westpac, NAB and St George joined the CBA in cancelling credit cards to protect their customers.
The move left these customers over the weekend without credit card access. There are also concerns that periodic payments made by credit card will fail if payment details are not updated.
In an effort to lead consumers to face potentially embarrassing situations when attempting to purchase goods with their cards over the weekend, most banks moved to alert customers of the situation.
“The bank continuously monitors all credit card transactions to protect our customers from fraud – and during this process we became aware of a potential credit card compromise through an Australian merchant acquired by another bank,” a CBA spokesperson told The Australian. “Customer cards are being reissued as a matter of priority.”
MasterCard and Visa could issue penalties including fines to the acquiring bank, which is not the CBA, under the payment industry’s PCI-DSS compliance rules.
The Privacy Commissioner is aware of the breach, but did not say if his office is investigating the incident, while NSW Police said no report had yet been made to the Fraud Squad.
Australian Bankers’ Association chief executive Steven Munchenberg said ABA would investigate what had happened and make an assessment if the breach required criminal investigation.